'No expertise to deal with IMF': Ex-investment banker wants Pakistan FM to quit

As Pakistan races against time to secure a much-needed billion dollars from the global lender IMF, a former investment banker has said that the current finance minister should immediately step down if the country wants to avoid further slide. Pakistan is just days away from default as its forex reserves have slipped below $3 billion, limiting the government's ability to service imports beyond three weeks. Now, only the IMF fund can save Pakistan.

Also Read: 'Move beyond Jinnah': A financial guru traces the origins of Pakistan's economic despair

However, Yousuf Nazar, a former equity investments head, on Thursday said finance minister Ishaq Dar has no expertise either to work with the global lender or introduce reforms. "If we want to have any hope of stopping the slide, Mr. Dar must be removed," Nazar said. "Otherwise, we should be prepared for even worse days ahead." 

Ishaq Dar, who took the charge as finance minister in September 2022, has been leading Pakistan's talks with the IMF for a crucial bailout package. Before becoming FM, he was the minister for Industries & Investment, and Commerce. On Wednesday, Dar proposed a series of measures to raise Rs 170 billion to secure funds from the IMF.    

Right now, Nazar said, Pakistan is facing the scenario of a hard landing of the economy, "that is - negative GDP growth and an increasing probability of default". Global rating agency Fitch, too, has said that Pakistan is facing a real possibility of default.   

The financial expert said Pakistan's inflation could hit 35 per cent, exports and remittances would fall, and the debt burden will increase. "Pakistan will sink deeper into a quagmire," Nazar, the author of Balkanisation and Political Economy of Pakistan, said. 

Also Read: 'They appointed Manmohan Singh': Top economist praises India, blasts Pakistan leaders for default crisis
 

Meanwhile, a top Pakistani-American economist has advised Islamabad to first fix the society if it wants to fix the economy. "Economy is related to society. Fix the society, the economy will also be fixed," Atif Mian, Professor of Economics at Princeton University, said in a tweet on Thursday.

Earlier this month, the professor blasted the Pakistani leaders for not appointing competent people who understand finance. He said Pakistan's leaders need to realise that they can not run the country of 220 million people by appointing family members, brothers, and brothers-in-law in all important positions.

In the last few days, Pakistan has taken some tough calls like increasing the prices of petrol and diesel to required to secure funds from the IMF. On Thursday, the finance minister introduced a new bill in which he proposed to hike GST from 17 per cent to 18 per cent and 25 per cent tax on luxury items. He has also proposed a tax hike on first-class and business-class air tickets. The federal excise duty of 20 per cent of the airfare or Rs 50,000, whichever is higher, will be levied.